Hrmn 365 - Labor Conflicts with Corporations

Karan Bhatt

HRMN 365 6381

August 10, 2010

Topic: Labor Conflicts with Corporations

Introduction

In 2003, California endured the longest supermarket strike in the US history. On October 11, 2003, the UFCW declared a strike on Vons, owned by Safeway Inc., in Southern California, because of company-proposed changes to the new labor contract. These changes included cuts in health care and pension benefits, and the creation of a two-tier system in which new workers would be paid on a different schedule than existing workers. The day following the strike, Albertsons and Ralphs, owned by Kroger, locked out their Southern California employees. More than 70,000 grocery workers picketed outside their stores for almost five months. Although the two sides eventually reached an agreement, they both endured heavy losses. Many workers went into heavy debt while they were on the picket lines. Some even lost their houses. The chains suffered too, losing more than one billion dollars in sales. Union employees voted to end the strike, and many employees cited financial difficulties as a reason for ratifying the agreement. We cannot underestimate the importance of this labor conflicts rose against the corporation. It has taken 70 years of struggle for these grocery workers to win the relatively decent wages and benefits that they have today. These victories would have disappeared if the companies had their way. The behavior of the supermarkets suggested that they understood just how important this battle really was. Overall, my paper is on labor conflicts with corporations. I have discussed how the labor union and corporation resolved the conflicts. Currently, I am working with Safeway, Inc., therefore, my paper demonstrate the conflict situation rose between Safeway, Inc. and its workers. I have also discussed the conflict resolution strategies adopted by the company and the labor union and given some recommendations for how to handle that situation more effectively.

Research

In depth, on the labor side, the primary party was the United Food and Commercial Workers union (UFCW). On the management side, it involved the supermarket chain companies Vons owned by Safeway, Inc., Ralphs owned by Kroger, and Albertsons. On October 11, 2003, employees of Vons went on a strike action. The employers all had agreed to lock out their workers if any member of the employer association was struck by the unions. Over 70,000 union workers went on strike, and 900 stores were affected throughout southern California. As Wal-Mart began aggressively opening stores in California, other supermarket chains claimed they were able to undercut local prices because they were non-union and the employees were all new hires. This put pressure on the existing unionized grocery stores to lower their operating costs. The unions saw this as a race to the bottom wherein these companies demanded separate health and pension plans for current and future employees. (BRODER, 2003) In the first stage of this conflict from the side of labor union, it looks like a perception, one of the three dimensions of conflict. According to this dimension of the conflict, the first stage of conflict begins when a group believes that its own needs, wants, or expectations are not being met. As the group thinks about it, it begins to experience one or more of the following emotions: anger, fear, powerlessness, or resentfulness. Finally, depending on the intensity of these emotions, a group may take action by engaging immediately in overt behaviors to have its needs, wants, or expectations met. The same thing happened with labor union. Without understanding the situation or trying to find any resolution, labor union announced a strike, which lasted for three months. On the other hand, the supermarket chain companies' perspective toward this conflict was poor. The supermarket chain companies saw this conflict as a problem, or a negative experience or relationship with labor union. Moreover, companies showed some firm steps after not accepting the demands made from labor union. Instead of taking these firm steps, the supermarket chain companies should see this as inevitable occurrences in any conflicts that may be resolved and that may help to strengthen the relationship. According to the new perspective concerning conflict, the supermarket chain companies should see this conflict as an outgrowth of diversity and an opportunity for mutual growth.

The cost of conflict extends considerably beyond money. It is often difficult employers and organization to understand the implications of the conflict. Some of these costs can be calculated in terms of lost productivity and wages, inappropriate decisions, employee turnover, unnecessary reorganization, lowered employee morale, absenteeism, and health-related costs. Other cost includes sabotage, theft, damage, legal expenses, and even loss of lives. Conflicts on the side of employees affect them personally in many ways. First, employees affect how they feel. Confrontations or disputes may anger them, scare them, intimidate or cause them sorrow. On the other hand, disagreements can also be exhilarating, energizing, and illuminating. Second, conflicts affect how and what employees think. Lastly, conflict also affects their behavior. The same thing happened with the employees who went on strike. At the same time, at the organizational level, we can see effects of conflict in at least three ways. First, conflicts can drive up the costs of doing business. Second, conflicts can also affect productivity. While conflict may stimulate effort and engagement,